Prices of crude oil for front-month contracts decreased on Monday amid the ongoing Israeli-Hamas negotiations that could de-escalate the crisis in the Middle East by potentially securing a temporary ceasefire in the Gaza Strip and the release of hostages held by the militant group in the enclave. European Union High Representative for Foreign Affairs and Security Policy Josep Borrell previously shared that several member states in the bloc plan to formally recognize Palestinian statehood by the end of May. West Texas Intermediate (WTI) for June deliveries fell 1.28% to sell at $82.68 per barrel at 10:41 am ET. For the same month’s settlements, Brent declined 1.20% to trade at $88.28 a barrel.
Oil Drops as Progress on Cease-Fire in Gaza Shrinks Risk Premium
Momentum toward a cease-fire has been building, with US Secretary of State Antony Blinken saying he will step up his push to secure a truce in Gaza during a visit to the region. The White House said Israel has agreed to hear out its concerns and hold off invading Rafah until meeting with the Americans. Still, the gap between the two nearest Brent contracts was about $1 a barrel in backwardation, a bulllish indicator that signals tight near-term supply. Benchmark North Sea crudes have also seen a spate of buying in recent days. Crude has risen this year on OPEC+ supply cuts and heightened tensions in the Middle East.